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Trickle-Down Verification

If U.S. Premium Beef's (USPB) recent announcement that it will pay $10/head for source verification is any indication, more cow-calf producers, and the stockers who buy their cattle, need to start creating and transferring data that makes tracking and attribute verification possible. We believe producers who can trace cattle back to their origin and provide age verification will obtain more value

If U.S. Premium Beef's (USPB) recent announcement that it will pay $10/head for source verification is any indication, more cow-calf producers, and the stockers who buy their cattle, need to start creating and transferring data that makes tracking and attribute verification possible.

“We believe producers who can trace cattle back to their origin and provide age verification will obtain more value relative to the market,” says Steve Hunt, CEO of USPB. “While there is not the level of interest domestically that we see in Japan currently, interest in source verification in this country is growing, and will revolve around perceived or actual risk expressed by the consumer.”

USPB's premium for source and age verification is a trial of sorts. Producers can enroll cattle now that will be delivered to USPB-owned National Beef this spring.

“Negotiators are moving toward a paper trail for export to other countries, particularly to Japan,” Hunt says. “As we look at the rules being negotiated with Japan, we see that a limited number of cattle will qualify, so I think there will be value in cattle that can qualify.

“Currently we're looking at the export markets, particularly at Japan, and we all understand it takes time to develop eligible supplies. We've started with $10/head for spring delivery. That's subject to change. As things develop, we anticipate that value could move higher,” Hunt says.

Conversely, there's a chance rules could change to allow group ID permits, which presumably would make it easier for cattle to qualify. Verification in that instance would have less value.

“We're certainly still learning, but we feel there's time to start developing these supplies,” Hunt emphasizes.

For perspective, current negotiations with Japan revolve around that government accepting carcass maturity grades as verification of age. USDA says Japan has accepted its study supporting a carcass maturity grade of A40 as characterizing cattle 12-17 months old. That would fit the Japanese demand that only cattle verified to be 20 months or younger be eligible for export to them.

Verifying age

Carcass maturity is basically calculated as an average between the maturity scores USDA graders assign for lean tissue maturity and for skeletal maturity. As it's a subjective score, some in the industry believe records-based age-verification ultimately will still be required.

In fact, while there's no industry market standard, USDA does have a Beef Export Verification (BEV) program for Japan that spells out how cattle eligible for export to Japan need to be identified and age-verified.

Available at www.ams.usda.gov/lsg/arc/bev.htm, the document says cattle must be traceable to live animal production records, be it through individual or group age verification, or insemination age verification. In each case, individual animal ID is required.

BEV also calls for exporting companies to maintain a list of approved suppliers available for USDA review. And, exporting companies must agree to USDA audits to verify their compliance with BEV rules.

However it plays out, producers with records verifying age and source will be better positioned to comply than those without it. As an example, suppose a feedyard sends an animal purchased from you to harvest. If the USDA grader assigns a maturity score making that animal ineligible for export, records provide the basis for a challenge. In addition, records might make the feeder less likely to dock the next load of calves you send him.

Incidentally, lest anyone wonder why packers don't just ignore the Japan market, Hunt explains, “It's as much as 15% of our market. Just imagine losing your biggest single customer. I think it's critical for all in the beef industry that we get that market back, but under terms supported by science.”

In fact, Cattle-Fax estimates there's about $10/cwt. (basis fed cattle) lost due to markets still closed to U.S. exports. Historically, Japan has been the largest U.S. beef customer on a value basis.

What's needed for verification?

Keep in mind, the industry is after the ability to trace individuals or groups of cattle back to source and processes. So, ID is not the goal; ID is the means by which the goal of verification is made possible.

“We recommend cow-calf producers tag their calves, keep track of individual animals and birth data,” Hunt says. “Whether it be through private treaty, auction or other procurement means, we recommend stocker operators make sure this data is transferred.”

Data in this case includes everything from names and phone numbers of the folks who produced the calves, to the records supplied, which attest to the calves' age.

Likewise, Dale Blasi, Kansas State University Extension beef cattle and stocker specialist, says, “In essence, we're seeing the emergence of a born-on label, which will be used as a gold standard for operations either large enough to package sizable groups to market, or for producers who possess meticulous record keeping capabilities.”

Blasi says the implications will have far-reaching effects in terms of how producers may choose to package and market their animals.

Some cattle ID options

The good news is, in addition to the BEV requirements mentioned earlier, stocker operators already know some of the questions to ask their suppliers. For instance, most states are now registering premises as part of USDA's National Animal Identification System (NAIS). It's aimed solely at monitoring the health of the nation's livestock herd, and being able to track an animal with a foreign animal disease or other List A disease back to all previous locations of residence within 48 hours. So, obtaining a premises ID number from your supplier, while not necessarily required by the market today, is more meaningful than getting a name and phone number of who raised the cattle.

Likewise, while still nascent, producers can currently tag cattle with NAIS-compliant numbers. Again, while it's not yet required by the marketplace, identity that complies with NAIS, which presumably will become the industry standard, carries more weight than ID numbers used for management only.

As for tag type, Hunt says USPB has had “a great experience” with radio-frequency ID (RFID), but isn't requiring it at this point. He encourages folks to begin thinking in that direction, though. The working group hashing out NAIS details for the beef industry has also recommended RFID.

For stocker operators, this is what folks like Blasi are encouraging cow-calf producers to do:

“I recommend each calf be individually identified with a visual dangle ear tag unless the producer's customer, such as sale barn, stocker operator or feedlot, specifically requires an electronic RFID tag,” he says.

Further, while tagging all calves shortly after birth and recording their birth dates would be ideal, Blasi knows that may not be practical for most commercial operations.

“Based on the most recent National Animal Health Monitoring System survey and how cow-calf producers typically identify their calves and when, producers may want to think about tagging calves born during the first half of calving season with a different colored tag than those born during the last half,” Blasi says.

In this scenario, a producer would call the first observed calving the calving date for the early group. Blasi says you would add 50 days to that date and tag all these calves with the same colored tag. This approach at least establishes a group age — every calf in the group taking on the age of the oldest calf in the group. So far, that seems compliant with USDA BEV rules, as long as the age is substantiated by production records.

“When getting ready to move cow-calf pairs to summer grass, when calves are normally branded and vaccinated, identify the remaining calves with a different colored tag. This processing date will effectively become the born-on date for this latter group,” Blasi says.

“I realize there would be younger calves included in the second group,” Blasi adds, “but many producers won't be willing or able to gather calves on a routine basis during calving season to identify them.”

Such a system isn't perfect, but it's a realistic approach to getting calves tagged and age-verified where such a system hasn't before existed. Another option, of course, is for producers to tag calves individually and track the birth dates of each.

Again, depending on the demands made of stocker customers, it will be up to them to decide what's acceptable from their suppliers.